Organic To Go, the nation’s first fast casual café chain to be certified as an organic retailer, announced it has expanded its west coast chain with the acquisition of four cafés and a catering business operating under the name of High Noon from Balducci’s Food Lover’s Market.
This business, generating approximately $6 million in annual combined revenues, has three locations in the District of Columbia business district and one in Arlington, Virginia. This acquisition provides Organic To Go with its first center of operations on the east coast.
“The High Noon acquisition immediately gives us four prime retail locations, a strong catering operation, and a proven management team in Washington, DC, says Jason R. Brown, founder and CEO of Organic To Go.
This most recent acquisition has been a part of the Organic To Go plan for aggressive expansion that takes advantage of its scalability of operations in a region. Organic To Go will continue its format of a ‘hub and spoke’ model with a commissary kitchen (the ‘hub’) in each of its geographic markets providing organic prepared food to the local cafés and delivery/catering operations as well as to dedicated wholesale locations (the ‘spokes’).
In addition, Organic To Go announced that it has signed a definitive debt financing agreement with its largest investor partner, Inventages Venture Capital Investment Inc., one of the world’s largest life-sciences, nutrition, and wellness focused venture capital funds with $1.5 billion under management. The agreement provides for a $5.0 million convertible note and warrant financing at $3.00 per share, with the option to draw down up to an additional $5.0 million, for potential future expansion, at the Company’s discretion for a period of nine months following the closing.
“Organic/Natural Food consumption has grown over 12 percent per year for the past 10 years and, as Whole Foods has proven again and again, there is tremendous opportunity for further expansion on the east coast in the right demographic concentrations. Foodservice in America represents over 48 percent or $480 billion in sales each year of total food consumption, and at this point there is less than 5 percent in foodservice sales in the $30 billion Organic and Natural segment. Not only does conventional wisdom point to a growing demand for organic and natural foods, recent studies show a continued upswing in demand for organic products with consumers’ increased understanding that organic food is safer for the environment and that it is a healthier alternative,” Brown concludes.
